Indian IT Stocks Stumble, Following U.S. Peers as AI Angst Resurfaces

By Kimberley Kao and Fabiana Negrin Ochoa

Accenture's share slide overnight bled over into major software stocks in India on Friday, reflecting continued worries that artificial intelligence will render some IT services obsolete.

Information-technology consulting firm Accenture's stock plunged 18% Thursday after it cut revenue guidance for the fiscal year, resurfacing concerns about the health of the broader sector.

U.S.-listed shares of Indian IT heavyweight Infosys slid 9.7% overnight, while Wipro lost 3.6%.

That continued into the last trading day of the week in India, with Infosys down 7.6%, Tata Consultancy Services losing 5.6% and Wipro 2.7% lower.

India's benchmark Sensex index lost 1.0%.

IT stocks are expected to remain under pressure following Accenture's weak outlook, said Nandish Shah, deputy vice president at HDFC Securities.

For Citi analysts, the read-through of Accenture's quarterly results and guidance doesn't bode well for Indian IT companies. The U.S. firm serves as a bellwether for the India sector, which has sizable exposure to areas of weakness like the North American market.

They remain cautious toward the sector given AI disruption, increased competition and macro uncertainty.

A steady stream of tools released by AI developers that can automate complicated office and legal tasks spurred a $1.6 trillion wipeout in software stocks earlier this year.

Another headwind comes from the enduring impact of the Middle East conflict.

Accenture flagged a direct revenue hit to its Middle East business due to the conflict, and Nomura research analysts expect similar hits to revenues and deal bookings for the India IT services sector in the current quarter.

The indirect effects may spill over into the coming months as it remains unclear how quickly spending behaviour will normalize especially in sectors like automotives, Nomura said.

Still, AI can continue to drive demand for cloud, data and platform modernization services, it added.

"The AI implementation opportunity will surely materialize" for Indian IT firms, "but it may not accrue to the traditional vendors like it did in the past and a new, platformised AI native vendor template will emerge," Motilal Oswal analysts said in a report.

Accenture's earnings are a bad sign for India IT firms, Motilal Oswal said, noting that outsourcing bookings fell and there are limited triggers to improve revenue. It expects most large companies in the sector to report weak earnings for the current quarter.

Write to Kimberley Kao at kimberley.kao@wsj.com and Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

June 19, 2026 03:53 ET (07:53 GMT)